THE BANGKO Sentral ng Pilipinas (BSP) revealed Thursday that the country’s gross international reserves totaled $76 billion as of May 31 based on latest preliminary data.
Disbursements arising from maturing foreign exchange obligations of the national government and revaluation losses on the BSP’s gold reserves caused the end-May GIR to be roughly $500 million less than it was at end-April.
The BSP pointed out that the end-May 2012 GIR “could adequately cover 11.4 months worth of imports of goods and payments of services and income. It is also equivalent to 10.8 times the country’s short-term external debt based on original maturity and 6.6 times based on residual maturity.”
In the latest issue of its Philippine Update, the Australia and New Zealand (ANZ) Banking Group Ltd. noted that the Philippines foreign reserves are more than double what it was in September 2008 when the global financial crisis struck.
ANZ said that the high GIR shields the country from external shocks by providing "much stronger liquidity cover of residual maturity short-term debt and unscheduled portfolio liabilities.”
It also said the country’s “aggregate liability exposure” to European banks was only around six percent to seven percent of the foreign reserves.
ANZ added that the local banking system is “well capitalized” while loan to deposit ratios remained under 70 percent.
“We maintain our view that the Philippines’ GDP is likely to grow by five percent year-on-year and the surprisingly strong first quarter result of 6.4 percent growth lends upside risk to this view,” it added.
“The main risk in the second half is a Europe-led slowdown which impacts the rest of Asia excluding Japan. The main channel of impact is through the Philippines’ narrow and electronics-dominated export sector,” ANZ said. (GMA News)